ASA Urges SEC to Drop Climate-Disclosure Rule

WASHINGTON – The American Securities Association (ASA) today submitted a comment letter urging the Securities and Exchange Commission (SEC) to drop its climate-disclosure rule and refrain from fundamentally transforming the securities laws in this way without express Congressional authorization.

“The SEC’s climate-disclosure rule exceeds the Commission’s statutory authority, is arbitrary and capricious, and raises serious First Amendment concerns,” ASA CEO Chris Iacovella wrote in the letter. “The ASA urges the Commission to drop this rule and refrain from fundamentally transforming the securities laws in this way without express Congressional authorization.”

“The Commission has long required companies to disclose ‘material’ information and under this principles-based standard, companies disclose information that a reasonable investor would find important when deciding whether to purchase or sell a stock or how to vote as a shareholder,” Iacovella wrote. “This standard protects investors by ensuring that they are not inundated with irrelevant information, and it helps companies and promotes capital formation by limiting the reach of burdensome, expensive disclosure requirements.”

In the letter, ASA outlined how the proposed rule improperly abandons the Commission’s longstanding principles-based approach to disclosures, how its cost-benefit and public-interest analysis is flawed, that it improperly favors the views of asset managers over retail investors, why it will increase liability risks by forcing the use of suspect data, and how it will create new regulatory burdens for private businesses that the Commission has no authority to regulate.

Finally, the SEC’s cost-benefit analysis intentionally woefully understates the Proposed Rule’s cost to American companies, its impact on small business capital formation, and exactly how the SEC plans to empirically prove to the American public how the disclosures under the Proposed Rule will impact global temperatures, America’s reliance on foreign sources of energy, or the cost of food, gas, heat, and other goods and services American citizens need to live.

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